So, let's get started. Nasdaq is doing a lot of exciting stuff. Talk about the move to 24/7 trading and how it's progressing, what's working, what might be taking a little longer.
Sure. Well, as you know, Joanna, we've been on a journey to really transform Nasdaq into a global technology company that serves the full financial system. And a big part of that has been to really architect the world's most modern markets. As we think about the future of trading, the future of trade infrastructure, not only as a market operator, but also we provide our technology to 135 other market operators and regulators around the world. And we provide core trade infrastructure technology to hundreds and hundreds of broker-dealers and banks around the world. So, we're really proud of the role we play, but that also means we have a lot of responsibility. There's a huge push, and there's for good reason, towards always-on markets. The first step of that will be 23/5 trading in US equities starting in December 6th of this year. Now, that trading occurs 24/5 today, but not in the exchanges. So, the exchanges are coming to the world. We're inviting the world into our markets. We're very, very excited about it, and I think that that's a first step towards always-on.
Moving from 23/5 to 24/7 is actually a massive lift for the entire industry. I would say the easiest part is the exchange infrastructure. We provide 24/7 technology to other market operators around the world today. So, that part we fully understand how to architect. But when you move from having time off either to manage your systems or patch the systems or make sure that you're upgrading things, and you have the luxury of a weekend, you architect your systems differently. And if you're behind the scenes managing risk management, collateral management, you have blocks of time where you can do batch processing or things like that that allow you to have a different infrastructure to support your activity. You move to always-on, everything has to be real-time all the time. Risk management has to be real-time all the time. You have to think about collateral management and the flow of capital needs to be real-time all the time. Why tokenization is so important. But also, it means that every bank and broker's infrastructure needs to change. So, we're building that into our trade infrastructure technology while we're also bringing our markets into this environment.
Okay, so talk a little bit more about tokenization and what you're seeing on that front in terms of how traditional financial markets are moving toward it and what are the benefits and drawbacks?
Yeah. Well, I think actually it's been really interesting to see the convergence of retail interest and institutional interest come together. And I would argue that it's really been in the last year partially on the back of the Genius Act getting approved by the US Congress because it cleared the way for the rules of the road for stablecoin to be a part of the core infrastructure in the US banking system. And that's important because it means that if we can tokenize money, then we can tokenize the flow of capital. And if we can tokenize the flow of capital, there are a lot of forms of capital that really get stuck in different collateral pools around the world today, whether it's treasuries, equities, other fixed income products, money market funds. But if you tokenize all those instruments along with the flow of money, then the collateral becomes very fluid and that will free up tens and tens of billions of dollars of capital that's trapped with bank capital that's trapped within the collateral pools today. So, there's suddenly this institutional interest towards, wow, I can use that collateral and put it to work. So, I'm very motivated to put that infrastructure in place. The retail ecosystem, as we know, has been kind of 10 years ahead. They, you know, retail investors want to be able to trade anything all the time, anywhere. And if they can put it into a tokenized form and keep it there, it allows them to move their capital into lots of different tradeable instruments. So, that interest has been there for a while, but that convergence has really come in the last year, and that's why you're seeing so much momentum now towards tokenization.
Oh, interesting. So, what's the role of artificial intelligence? We've got to ask about that these days, right? So, what are you seeing with that? How is that changing exchanges, tokenization, everything?
Sure. Well, it's so interesting that these technologies are actually coming together at the same time because, as I mentioned, if you have to manage risk real-time all the time and you have to think about that, having a lot of humans in that loop, it's going to be very difficult. So, bringing AI into the risk management frameworks, we leverage AI very extensively in anti-financial crime. So, you know, AML, so anti-money laundering, fraud detection, we have very advanced AI capabilities. We serve 2,800 banks with our anti-financial crime technology. And the AI capabilities there, both algorithmic and Gen AI, is just amazing in terms of how to create more efficiency, but really much more effectiveness in rooting out criminal actors. But then, you also have, as I mentioned, kind of trade infrastructure. And you'd say, well, why does that matter? Well, if you're managing risk 24/7 across multiple instruments with billions of capital, you need to make sure that you're properly reflecting your risk and you're properly reflecting your collateral and moving that collateral, and AI can be hugely helpful. So, we've launched a series of digital agents inside our Calypso platform, which is our trade infrastructure platform, that allows for clients first to, we would make recommendations in terms of what their risk recommendations are, but over time we would expect that the banks would start to use that to actually drive the actual behavior. They may take the human out of the loop in a 24/7 environment. So, AI is critical for 24/7, but it also will change finance in many other ways.
Right. Okay, can you talk a little bit about Nasdaq's overall strategy at kind of a 40,000-foot level? What are you focusing on? Some of it you've talked about already, but just in general, where is the exchange headed?
Yeah, so well, we've been focused on three key pillars of our strategy because as we've grown and expanded the business to really leveraging the market infrastructure and having a bigger impact on the industry, we've been really excited about three key elements. So, the first is, as I said, architecting the world's most modern markets. How do we really drive that? But the second is really driving, I would say, protecting the markets with integrity and so making sure that, as I said, anti-financial crime, risk management, surveillance, those technologies are as advanced as possible to keep the world's financial systems safe and secure. And then the third is powering the innovation economy. We are very fortunate to be the home of the most innovative companies in the world, but we also have the opportunity to create investable products on the back of our listings with the Nasdaq 100 index and other Nasdaq indexes, and we just crossed a trillion dollars in AUM, assets under management associated with our index or indexes. So, we're really proud of the fact we have such a huge impact today across the system.
What about the IPO pipeline and just these mega companies that are looking to go public? What are you seeing with that and how is that playing into the tokenization AI theme?
Well, I think that, well, actually you're right because I think you've seen several companies that are really driving the tokenization of markets come public earlier in the year. That happened primarily, I would say, in Q1 and into Q2. And then we've seen, of course, the AI build-out, you know, the infrastructure that supports AI, the model companies themselves, as well as, you know, just the whole overall AI trade is enormous, let's just say. So, you've got the energy companies, the construction companies, data center companies, memory companies, semiconductor companies. So, there's hard tech, there's hard infrastructure, there's energy, and then there's also, of course, all the applications, the model companies themselves, with SpaceX going public earlier this year is an example of that. And then also all the application companies that are going to be built on the back of AI. It is a new economy that's being created today. I mean, it's incredible. And it will require a lot of capital. So, we're very proud of the fact that the public markets are a great source of that capital in addition to the private markets. I think it's been a real convergence of public and private. And we'll see how we continue to see these great companies come to market.
